Terminal Owners Sue over Love Deal

The Fort Worth Star-Telegram On Jul 19, 2006
Source: via NewsEdge

The owners of the Legend Airlines terminal at Dallas Love Field Airport filed suit in federal court Monday to halt the proposed compromise on the Wright Amendment, alleging that it violates antitrust law.

Love Terminal Partners, which owns the vacant terminal on Lemmon Avenue at Love Field, is suing Fort Worth and Dallas, American Airlines, Southwest Airlines and the Dallas/Fort Worth Airport board in federal court in Dallas. The suit charges that the Wright compromise, forged by the cities, the airlines and D/FW last month, is "a blatant violation of the federal antitrust laws."

The suit also claims that the deal destroyed the value of the terminal, which the group had been negotiating to sell to Pinnacle Airlines, a regional carrier that feeds traffic to Northwest Airlines, for $100 million.

"This is about as predatory and anti-competitive a scheme as I've seen in over 20 years of practicing law," said Bill Brewer, an attorney for the group. "The two dominant carriers in North Texas agreed not to compete."

The Wright Amendment is a 1979 federal law that allows service from Dallas Love Field airport only to Texas and some nearby states. Southwest, which is based at Love and operates most of the flights there, began lobbying Congress in 2004 to repeal the law.

American, whose hub accounts for more than 80 percent of the traffic at D/FW Airport, fought the repeal efforts.

Last month, the mayors of Fort Worth and Dallas and the two airlines, as well as officials from D/FW, agreed to eliminate the geographic restrictions after eight years.

Fort Worth Mayor Mike Moncrief said that he wasn't concerned about the suit.

"I'm confident that we have done everything we need to ensure that our [agreement] is one that will pass legal muster," he said. "What we haven't done, I'm sure Congress will."

The agreement would also reduce the number of gates at Love to 20 from 32. Dallas Mayor Laura Miller said the city would seize the six-gate Legend terminal and tear it down.

Moncrief confirmed that Continental Airlines has signed on to the agreement.

Continental has two of the gates at Love and would keep both. Southwest would be left with 16 gates, and American would have two.

The agreement must be approved by Congress before it can take effect.

Brewer said the deal, in effect, resulted in American and Southwest dividing up the marketplace so they don't have to compete.

"They're agreeing to stay out of each other's back yards," he said. "And that means consumers will have to put up with higher prices to travel."

The suit asks the federal court to halt the cities from enforcing the agreement and seeks triple damages from American and Southwest plus court and attorneys fees.

Spokespeople from American, Southwest and D/FW Airport said they had not received the suit and could not comment. A representative from Dallas did not return phone calls late Monday.

The suit is the latest obstacle to hit the Wright proposal. Discount carrier JetBlue Airways has also raised antitrust concerns and charged that the deal blocks other airlines from accessing Love Field.

And officials in several North Texas cities have complained that some parts of the agreement could prevent smaller airports from getting commercial airline service in the future. That concern, strongly voiced by officials in McKinney, appeared to be settled Monday with a small revision to the compromise.

The antitrust lawsuit is the second suit the Legend group has filed over the Wright amendment negotiations. The company has also sued Miller, alleging that she ruined the value of the terminal by publicly saying the city was going to seize it and tear it down.

That statement caused Pinnacle to nix a deal to buy the terminal, the group says.

Staff writer David Wethe contributed to this article.

Copyright: The Fort Worth Star-Telegram -- 7/19/06

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